It was just a matter of time before a New York/London mathematician got a hold of something that might actually work past the debt system breakdown.

BTW, you can bypass the internet, banks, and Wall Street and starve them of all money and fees and help out worthy creditors by loaning money directly to a person with integrity that you know and trust. You can charge them a reasonable interest rate, get income, no one ships fees to Wall Street, no one creates derivatives that blow up whole markets, and you hold the collateral. If they don’t pay you back….you get the collateral and/or you get to deduct it as a loss. And you know where they live.

This is how a relative of gg’s bought their first house in 1952 with a 15-year loan to an individual who held a lien against the house.

But you must find a person of integrity 🙂

And, for those you know without integrity….

Side musing: if you have a “friend” that you can’t stand and want to get rid of….loan them money. You may not see your money again, but you will never see them again.

Gifts: you can also just give money to people, up to $14,000 per year per person without a tax liability on either side. If you want to see your character and/or the character of another person, don’t lend them money, give them money.

There is an ongoing debate about what the US is going thru and what it will go thru: inflation or deflation?

Martin Armstrong says we are in a deflationary monetary cycle. And in the big picture, he is right.

However,

Groovygirl has always said, it depends where you are. And gg has always said, it doesn’t matter how cheap a product/service is, if you don’t have any money to buy it. It is always about can your wages buy the necessaries or not? It really doesn’t matter the actual price, it’s the relation. Can you pay cash to buy a car or must you borrow? Can you borrow? Can you afford the monthly payment? A house? College? Health care? What percentage of your monthly income is spent on debt? 10%, 25%, 50%? If your wages go down, it could turn into 75% overnight?

I remember my grandfather talking about the Depression. He said he was much better off than many people because he had a steady job. He didn’t get a raise for 10 years, but he could save money and buy a car, because prices were low or relatively lower than before 1929/1930. He didn’t have to go in debt to survive. He could pay for food and rental housing and some extras like a car. And he wasn’t ever unemployed during that time.

People were in trouble during the Depression, because they couldn’t get a job, couldn’t earn enough (Farmers) to buy food and shelter, or couldn’t keep a steady income over that 10-year period and fell into debt to buy necessities. So, prices were expensive to them and many were starving and homeless.

It’s the relation of wages (employment) to prices. That’s why people are protesting for a higher minimum wage.

(That’s why people are leaving California with its high state income taxes and high property taxes for the Midwest. That’s why seniors are flocking to states, like Florida, that have no state taxes. People that can move are moving. They can do math and they can save 10-30% simply by moving to a different state and might get a better or steady job.)

But in Germany in the 1930’s, it was all about inflation. But inflation in prices didn’t keep up with wages (because of the country’s debt and their short-term solution of currency manipulation). It was still about the disconnect between wages and prices, but this time is was an inflationary macro environment.

So, structure investments, jobs, and assets to bring in income/gains that will keep up with prices in your home currency. And don’t forget about taxes. Income taxes and other taxes were not as extensive in the 1930’s as they are now. They must be considered in the “price” of living and assume they will go up.

groovygirl thought this interview was a good, compact form of Martin’s October 2015 Turning Point and the following impact, what he is calling the “Big Bang” or blow up/reset of global debt.

Quote:

Will the Fed finally raise interest rates? Armstrong contends, “The Fed will have no real choice. . . . The Fed will come under significant pressure to raise interest rates because the newspapers and Congress will blame them and say they are creating a bubble with low interest rates. The more they raise interest rates, the higher the stock market will go. I know that sounds crazy . . . historically, interest rates bottom with the markets. I mean, you lose confidence and people won’t borrow.”

side musing: still the big debate about inflationary or deflationary. Groovygirl still contends that the US will have both, so prepare/hedge for both. GG also believes that parts of the globe will have inflation and other parts will have deflation. Groovygirl thinks this is one of the main reasons that this global debt reset will be so confusing and shocking.

As you know, gg has been into real estate investing lately. A perfect example of inflation and deflation happening at the same time within one market. US high-end real estate asset prices have been increasing and low-end real estate have been collapsing in price. And the mid-range depends on where you are in the US. Whatever market(s) you are investing in, educate yourself and understand all aspects of that market.

January 15, 2015

totallygroovygirlfriday has been super busy with real estate the last few years. Things are going well so far.

Groovygirl came across an interesting book by Tony Robbins. It’s called Money, you may have seen it. Tony has been making the rounds on TV/internet.

This is a heavy book, very dense (600 pages). It doesn’t focus on gold or silver. But gg likes it because it gives an overall education regarding investing , especially 401ks. (You know how gg feels about 401ks.) This goes beyond debt reduction and teaches you about investing and what to look out for.

If you are an advanced investor, don’t worry about it. But if you have a friend that is out of debt and looking for the next lessons to learn, suggest this book. Tony’s cheer-leading way of writing may help give a boost where you fail with a friend. Investing and markets can so confusing and depressing sometimes, that people just give up.

600 pages….skip around for the info you need, if you find that overwhelming.

Banks are claiming that it is because of the Frank-Dodd rules, which really are so thin now, that this argument just doesn’t hold water. In addition, what little worry banks had about actually being responsible for their depositors money just got voted out by the new spending bill tonight (December 11, 2014). So, gg thinks that the big banks are getting prepared. They are lowering the cash they may need to return to customers during a crisis and anything beyond their capacity to produce, they are putting on the government’s shoulders. Or someone to blame for lack of cash for depositors.

Although the stock market is going well. That’s about it. Oil is down putting major pressure on the US oil industry which is the only thing going well in the last 4 years. gg sees a major debt squeeze here if oil stays under $70 for the next 12 months. Debt has to be paid whether the oil well is running or not. Shutting down wells doesn’t pay off the bank, it just cuts payroll and hurts local economies.

Derivatives….the thing the big banks want the government to cover if (when) they blow up.

Derivatives, take your pick. Auto loans (maxed out), commodities (oil), stocks, government debt, Europe (still not fixed), China (slowing), emerging markets, and of course, currencies (very out of balance the last 8 months). Currencies are the largest derivative market. One or more can blow up at anytime and trigger a chain event. (Could be blowing up as we speak, but the chain reaction to multiple markets causes the crisis.) And the banks know that.

The good news is that since the government will cover any derivative losses for the banks, you will not lose money on deposit. May have to wait to withdraw it. (Money you can on get to, is not your money). Probably lose broker/invested money, it’s not covered. Groovygirl has suggested from the beginning to have investment funds with 2-3 different brokerage houses and then cash with 2-3 banks. That’s personal and business accounts. It’s extra accounting, but may reduce risk and at least have one account you can access immediately to keep things going in a crisis event.

Bad news is that the government will “print” to cover and you will be ultimately responsible for it through taxes, currency value, or perhaps even a brand new currency to restructure all the US debt.

This will not end well.

Make sure you are as protected as much as you can be. You can not control derivatives or government votes or market crisis, but you can control your money and finances.

I suggest to you that the next crisis will not be called a financial crisis. It will initially be labeled something else to keep people from assuming it is an event like 2007-2009 as long as possible. As this will cause everyone and anyone to “panic”. The time to prepare is yesterday, not tomorrow.

Groovygirl has been busy working her long-term investment plan. She hopes you are doing the same. The big wave seems to be a little slower to form. Martin says after 2015 (2016-2018). Goods news is you have more time to prepare. Bad news is it seems it will be an even bigger, more volatile wave.

September 30, 2014

groovygirl is keeping an eye on the outflow of funds from PIMCO. 12% now? Click here.

The number is not necessarily the issue. The issue is why pull money just because Gross left? Doesn’t sound right. Something else happening. And if it’s happening at PIMCO, is it a bond market problem. The government can solve a PIMCO problem. The government can not solve a systemic bond market problem. What is it? Don’t know. Have to wait and see. Is this a global issue? And where are the funds going? Stocks? Cash? Overseas?